Daily CPFL was negative by 2.63 to 1 Thursday after hitting new short-term high Tuesday.

Cumulative Volume (CV) in S&P 500 hit a new short-term high Tuesday and has backed off since then. CV action in S&P Emini an NASDAQ Composite has yet to confirm S&P cash on upside above September resistance.

Market Overview – What We Think:

Trend under way since November lows in all of major indexes may be in endgame given “Overbought” conditions and simple fact prices cannot continue higher indefinitely without some retrenching.

If move since November lows turns out to be A-B-C rally with “B” leg pullback from December 19 to January 2, “C” leg rally could be in termination phase.

While confirming movement in cash S&P CV to new short-term highs has been positive, failure of CV In S&P Emini and NASDAQ Composite means strength has been selective.

Longer-term lingering weakness in MAAD, CPFL, Cumulative Volume, and Momentum, is an indication market could be on borrowed time. Nothing but new highs by all our key indicators, an unlikely event, would erase negative divergence.

Index

Daily / Weekly / Monthly Stops

Weekly

Monthly

1/28

1/29

1/30

1/31

2/1

2/1

2/28

S&P 500 Index

SELL1467.39

SELL1470.52

SELL1474.79

SELL1478.29

SELL1482.17

SELL1393.45

SELL1330.62

Dow Jones Industrials

SELL13465.24

SELL13501.33

SELL13548.19

SELL13600.05

SELL13552.08

SELL12901.57

SELL12570.95

NASDAQ Composite

SELL3108.12

SELL3111.70

SELL3119.72

SELL3121.81

SELL3125.47

SELL2936.97

SELL2862.45

Value Line Index

SELL3284.42

SELL3293.98

SELL3305.88

SELL3316.66

SELL3328.72

SELL3030.39

SELL2817.27

Note: Stop levels, a function of the extant trend, are based on the trailing moving average price channels for the Highs or the Lows of an index. Whether or not a specific index is suggesting a “Buy” or Sell” is determined by whether or not index prices are above or below the current channel Stop levels. Stop levels should only be used as an entry or exit guide and in conjunction with other market entry and exit strategies.